The Oil Industry in Nazi Germany, 1936-1945

NAZI OIL INDUSTRY 257
vation provided a reason for big business to support the policy of autarky
as well, especially immediately after the Nazi seizure of power.
Hjalmar Schacht, a banker who represented the interests of big business
in the Nazi government as minister of economics from 1934 to
1938, believed that the synthetic oil and rubber industries should be
supported and encouraged by the state. However, he thought that synthetics
should be developed only on a small scale and as a stopgap
measure to save desperately needed foreign exchange until the world
trade system began to function satisfactorily once again. It was to this
end that Schacht forced brown-coal producers to form Braunkohle-
Benzin, AG (BRABAG) in 1934 to produce synthetic oil from brown
coal.6
In contrast, the Nazis supported rearmament and autarky not on
economic but on political and military grounds. One of their major
policy goals was territorial expansion to the east, which would necessarily
involve either war or the recognized potential to wage it-thus
the dedication to rearmament. In addition, believing that the German
defeat in 1918 had been due in large part to the country's dependence
on imported raw materials, the Nazis logically favored the development
of as much self-sufficiency as possible. In this, they were heavily
supported by the army.
Despite their differing assumptions, the government and industry
were able, albeit with some difficulty, to cooperate until mid-1936. A
severe trade crisis then ensued. Rearmament had necessitated the
large-scale importation of raw materials without producing corresponding
exports, a situation that resulted in a RM 500 million balance-of-trade
deficit by the end of 1936. In addition, the high level of
employment (achieved through rearmament and other government
programs) produced a high level of purchasing power, which resulted
in an increased demand for imported foodstuffs.8 Minister of Economics
Schacht, supported by certain elements of heavy industry (most
6 Dieter Petzina, Autarkiepolitik im dritten Reich: Der national-sozialistische Vierjahresplan (Stutt-
gart, 1968), 36, 43; William Carr, Arms, Autarky and Aggression (New York, 1972), 52; T. W. Mason,
"The Primacy of Politics-Politics and Economics in National Socialist Germany," in The Nature of Fas-
cism, ed. S. J. Woolf (New York, 1968), 179. For a more nuanced view of the chemical industry in
particular, see Helmuth Tammen, Die I. G. Farbenindustrie A.G. (1925-1933). Ein Chemiekonzern in
der Weimarer Republik (Berlin, 1978), esp. 143-44.
7 For Nazi goals and reasoning, see the summary of Hitler's memorandum of mid-August 1936 in
Petzina, Autarkiepolitik, 48-52; Norman Rich, Hitler's War Aims: Ideology, the State and the Course of
Expansion 1 (New York, 1973): 3-10; and Ludolf Herbst, Der totale Krieg und die Neuordnung der
Wirtschaft (Stuttgart, 1982), 36-42, 142-44. For the role of the Nazi reading of the causes of the German
defeat in 1918 in their development of policy, see Milward, War, Economy and Society, 26-28. For
support of the army, see Petzina, op. cit., 36-38, and Carr, Arms, 52-53. More recent research indicates
that the Nazis and others were mistaken in attributing to raw materials shortages a key role in the German
defeat in 1918. Gerd Hardach gives much more emphasis to the factors of transportation outages, coal
shortage, and insufficient labor. See Hardach, The First World War (Berkeley, 1977), 30-34.
8 Mason, "Primacy of Politics," 178; Petzina, Autarkiepolitik, 45-46.